What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 90 added, 90 removed, 386 unchanged (32% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

September 30,

Current assets

23 unchanged sentences

Common stock, $ 0.0001 par value;

200,000,000 shares authorized at June 30, 2024 and December 31, 2023;

43,951,922 shares issued and outstanding at June 30, 2024;

200,000,000 shares authorized at September 30, 2024 and December 31, 2023;

43,958,074 shares issued and outstanding at September 30, 2024;

27,613,263 shares issued and 27,607,646 shares outstanding at December 31, 2023

7 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

License revenue

15 unchanged sentences

Condensed Consolidated Statements of Stockholders’ Equity

For the three months ended June 30, 2024 and 2023

For the three months ended September 30, 2024 and 2023

(In thousands, except share data)

1 unchanged sentence

Paid-In Capital

Balance at March 31, 2024

Issuance of common stock and prefunded warrants in connection with the Gilead stock purchase agreement, net of issuance costs

Issuance of common stock and prefunded warrants in connection with a private placement, net of issuance costs

Issuance of common stock in connection with at-the-market offerings, net of issuance costs

Issuance of common stock under employee stock purchase plan

Vesting of restricted common stock

Balance at June 30, 2024

Exercise of stock options

Stock-based compensation expense

Balance at June 30, 2024

Balance at September 30, 2024

Stockholders’

Paid-In Capital

Balance at March 31, 2023

Issuance of common stock under employee stock purchase plan

Balance at June 30, 2023

Vesting of restricted common stock

1 unchanged sentence

Stock-based compensation expense

Balance at June 30, 2023

Balance at September 30, 2023

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Stockholders’ Equity

For the six months ended June 30, 2024 and 2023

For the nine months ended September 30, 2024 and 2023

(In thousands, except share data)

9 unchanged sentences

Stock-based compensation expense

Balance at June 30, 2024

Balance at September 30, 2024

Stockholders’

5 unchanged sentences

Stock-based compensation expense

Balance at June 30, 2023

Balance at September 30, 2023

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

30 unchanged sentences

Supplemental disclosure of non-cash activities:

Capital expenditures included in accounts payable or accrued expenses

Transfer of finance lease asset to property and equipment

Reconciliation to amounts within the consolidated balance sheets:

13 unchanged sentences

Since its inception, the Company has devoted substantially all of its financial resources and efforts to research and development activities.

As of June 30, 2024, the Company had an accumulated deficit of $ 356.6 million and has incurred significant operating losses, including net losses of $ 31.1 million and $ 42.0 million for the six months ended June 30, 2024 and 2023, respectively.

As of September 30, 2024, the Company had an accumulated deficit of $ 370.7 million and has incurred significant operating losses, including net losses of $ 45.1 million and $ 58.7 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company expects its operating losses and negative operating cash flows to continue for the foreseeable future as it continues to advance its product candidates through clinical trials, maintains the infrastructure necessary to support these activities and continues to incur costs associated with operating as a public company.

As of June 30, 2024, the Company had cash and cash equivalents of $ 74.9 million.

Based on its current operating plans, the Company anticipates that its existing cash and cash equivalents as of June 30, 2024 will be sufficient to fund the Company’s operating expenses and capital expenditure requirements into the second quarter of 2025.

As of September 30, 2024, the Company had cash and cash equivalents of $ 61.3 million.

Based on its current operating plans, the Company anticipates that its existing cash and cash equivalents as of September 30, 2024 will be sufficient to fund the Company’s operating expenses and capital expenditure requirements through the end of the second quarter of 2025.

However, the Company has based this estimate on assumptions that may prove to be wrong, and the Company could exhaust its available capital resources sooner than it anticipates.

In addition, since these amounts may not be sufficient to fund its operations for at least twelve months from the date of issuance of the condensed consolidated financial statements, there is substantial doubt about the Company’s ability to continue as a going concern.

In addition, since these amounts are not expected to be sufficient to fund its operations for at least twelve months from the date of issuance of the condensed consolidated financial statements, there is substantial doubt about the Company’s ability to continue as a going concern.

To continue to fund the operations of the Company, management has developed plans, which in the near term primarily consist of raising additional capital through one or more of the following:

3 unchanged sentences

However, there can be no assurance that the Company will be able to complete any such transaction on acceptable terms or otherwise, and the Company may be unable to obtain sufficient additional capital.

If the Company is not able to secure sufficient additional capital in the near term, the Company may in the future need to implement additional cost reduction strategies, which could include delaying, limiting, further reducing or eliminating both internal and external costs related to its operations and research and development programs.

If the Company is not able to secure sufficient additional capital in the near term, the Company will need to implement additional cost reduction strategies, which could include delaying, limiting, further reducing or eliminating both internal and external costs related to its operations and research and development programs.

In addition, if the Company’s efforts to secure sufficient additional capital in the near term are unsuccessful, the Company may in the future need to seek to engage in one or more other strategic alternatives, including without limitation, the sale or divestiture of some or all of its assets or proprietary technologies.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.

5 unchanged sentences

GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”).

Certain information

and footnote disclosures normally included in financial statements prepared in accordance with U.S.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations.

2 unchanged sentences

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements.

In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements contain all adjustments which are necessary to present fairly the Company’s financial position as of June 30, 2024 and the results of its operations for the three and six months ended June 30, 2024 and 2023 and cash flows for the six months ended June 30, 2024 and 2023.

In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements contain all adjustments which are necessary to present fairly the Company’s financial position as of September 30, 2024 and the results of its operations for the three and nine months ended September 30, 2024 and 2023 and cash flows for the nine months ended September 30, 2024 and 2023.

Such adjustments are of a normal and recurring nature.

The results for the three and six months ended June 30, 2024 are not necessarily indicative of the results for the year ending December 31, 2024 or for any future period.

The results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results for the year ending December 31, 2024 or for any future period.

Principles of Consolidation

10 unchanged sentences

The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates.

Significant estimates of accounting reflected in these condensed consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued expenses, the valuation of stock-based compensation, including stock options and restricted common stock, useful life of long-lived assets and income taxes.

Significant estimates of accounting reflected in these condensed consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued expenses, the valuation of stock-based compensation, including stock options and restricted stock units, useful life of long-lived assets and income taxes.

Actual results could differ from those estimates.

8 unchanged sentences

Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

To determine the appropriate amount of revenue to be recognized for arrangements that the Company determines are within

the scope of ASC 606, the Company performs the following five steps:

To determine the appropriate amount of revenue to be recognized for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:

(i) identification of the contract with the customer;

20 unchanged sentences

The amount of variable consideration that is included in the transaction price may be constrained and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.

At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all variable consideration subject to constraint, and if necessary, adjusts its estimate of the overall transaction price.

At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all variable consideration subject to constraint, and if necessary, adjusts its estimate

of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues in the period of adjustment.

4 unchanged sentences

● Milestone Payments.

At the inception of each arrangement that includes development or regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and

estimates the amount to be included in the transaction price using the most likely amount method.

At the inception of each arrangement that includes development or regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price.

30 unchanged sentences

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific

categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign).

Improvements to Income Tax Disclosures (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign).

ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

4 unchanged sentences

Property and Equipment, Net

Property and equipment, net consists of the following as of June 30, 2024 and December 31, 2023:

Property and equipment, net consists of the following as of September 30, 2024 and December 31, 2023:

September 30,

Laboratory equipment

2 unchanged sentences

Leasehold improvements

Construction in process

Total property and equipment

1 unchanged sentence

Property and equipment, net

The Company recognized depreciation and amortization expense related to property and equipment of $ 0.8 million and $ 0.9 million for the six months ended June 30, 2024 and 2023, respectively.

The Company recognized depreciation and amortization expense related to property and equipment of $ 1.2 million and $ 1.4 million for the nine months ended September 30, 2024 and 2023, respectively.

Accrued Expenses and Restructuring

Accrued expenses consist of the following as of June 30, 2024 and December 31, 2023:

Accrued expenses consist of the following as of September 30, 2024 and December 31, 2023:

September 30,

External research and development

4 unchanged sentences

In March 2024, the Company’s board of directors approved a strategic portfolio reprioritization and workforce reduction.

As part of the workforce reduction, the Company recognized restructuring charges of $ 1.0 million during the six months ended June 30, 2024, primarily related to employee severance, benefits continuation and outplacement service costs.

As part of the workforce reduction, the Company recognized restructuring charges of $ 0.9 million during the nine months ended September 30, 2024, primarily related to employee severance, benefits continuation and outplacement service costs.

The workforce reduction was completed in April 2024.

The Company made payments of $ 0.7 million related to the restructuring during the six months ended June 30, 2024.

All employee severance, benefits continuation and outplacement service cost payments are expected to be completed by the end of the third quarter of 2024.

The following table summarizes the accrued restructuring liability activity for the Company’s workforce reduction for the six months ended June 30, 2024:

The Company made payments of $ 0.9 million related to the restructuring during the nine months ended September 30, 2024.

All remaining employee severance, benefits continuation and outplacement service cost payments were completed in October 2024.

The following table summarizes the accrued restructuring liability activity for the Company’s workforce reduction for the nine months ended September 30, 2024:

Severance and

3 unchanged sentences

Restructuring payments

Accrued restructuring liability as of June 30, 2024

Accrued restructuring liability as of September 30, 2024

Loan and Security Agreement

3 unchanged sentences

In the first quarter of 2024, Xilio Development repaid all amounts outstanding under the Loan Agreement, and PacWest released all security interests in Xilio Development’s and its affiliates’ assets.

The Company recognized $ 0.1 million and $ 0.4 million of interest expense related to the Loan Agreement for the six months ended June 30, 2024 and 2023, respectively, which is reflected in other income, net on the condensed consolidated statements of operations and comprehensive loss.

The Company recognized $ 0.1 million and $ 0.6 million of interest expense related to the Loan Agreement for the nine months ended September 30, 2024 and 2023, respectively, which is reflected in other income, net on the condensed consolidated statements of operations and comprehensive loss.

Collaboration and License Agreements

6 unchanged sentences

In March 2024, the Company initially issued and sold 6,860,223 shares of common stock to Gilead at a purchase price of $ 1.97 per share and received approximately $ 13.5 million in aggregate gross proceeds.

In April 2024, the Company exercised its right to a first additional private placement with Gilead and issued and sold an additional 485,250 shares of its common stock at a purchase price of $ 0.76 per share and prefunded warrants to purchase up to an aggregate of 3,882,450 shares of its common stock at a purchase price of $ 0.7599 per prefunded warrant.

In April 2024, the Company exercised its right to a first additional private placement with Gilead and received approximately

$ 3.3 million in aggregate gross proceeds from the issuance and sale of an additional 485,250 shares of its common stock at a purchase price of $ 0.76 per share and prefunded warrants to purchase up to an aggregate of 3,882,450 shares of its common stock at a purchase price of $ 0.7599 per prefunded warrant.

The prefunded warrants are exercisable any time at an exercise price of $ 0.0001 per share, subject to Gilead not being deemed a beneficial owner of greater than 19.9 % of the Company’s common stock upon the exercise of the prefunded warrants.

The Company received approximately $ 3.3 million in aggregate gross proceeds from the additional private placement with Gilead.

As of June 30, 2024, the Company has received approximately $ 46.8 million in payments under the Gilead agreements, consisting of the $ 30.0 million upfront cash payment under the license agreement and approximately $ 16.8 million in gross proceeds from private placements under the stock purchase agreement.

As of June 30, 2024, the Company is eligible to receive up to $ 600.7 million in additional contingent payments, which consist of (i) approximately $ 8.2 million in proceeds from up to two additional private placements, (ii) the $ 75.0 million transition fee and (iii) up to $ 517.5 million in specified development, regulatory and sales-based milestones.

As of September 30, 2024, the Company has received approximately $ 46.8 million in payments under the Gilead agreements, consisting of the $ 30.0 million upfront cash payment under the license agreement and approximately $ 16.8 million in gross proceeds from private placements under the stock purchase agreement.

As of September 30, 2024, the Company is eligible to receive up to $ 600.7 million in additional contingent payments, which consist of (i) approximately $ 8.2 million in proceeds from up to two additional private placements, (ii) the $ 75.0 million transition fee and (iii) up to $ 517.5 million in specified development, regulatory and sales-based milestones.

Prior to the potential transition fee, up to $ 25.7 million of the total additional contingent payments are related to the potential additional private placements and a near-term development milestone.

11 unchanged sentences

The Company used the most likely amount method to estimate variable consideration.

All contingent payments are fully constrained as of June 30, 2024, as the achievement of the milestones underlying such contingent payments is uncertain and highly susceptible to factors outside of the Company’s control.

All contingent payments are fully constrained as of September 30, 2024, as the achievement of the milestones underlying such contingent payments is uncertain and highly susceptible to factors outside of the Company’s control.

Accordingly, all such contingent payments are excluded from the transaction price.

4 unchanged sentences

The Company measures progress based on the amount of costs incurred relative to the total costs expected to fulfill the combined performance obligation.

In management’s judgment, this input method is the best measure of progress towards satisfying the combined performance obligation and reflects a faithful depiction of the transfer of goods and services.

During the three and six months ended June 30, 2024, the Company recognized license revenue of $ 2.4 million under the license agreement and the stock purchase agreement.

As of June 30, 2024, the Company recorded deferred revenue of

$ 36.7 million, of which $ 26.5 million was recorded as a current liability on the Company’s condensed consolidated balance sheet as of June 30, 2024.

In management’s judgment, this input method is the best measure

of progress towards satisfying the combined performance obligation and reflects a faithful depiction of the transfer of goods and services.

During the three and nine months ended September 30, 2024, the Company recognized license revenue of $ 2.3 million and $ 4.6 million, respectively, under the license agreement and the stock purchase agreement.

As of September 30, 2024, the Company recorded deferred revenue of $ 34.5 million, of which $ 26.1 million was recorded as a current liability on the Company’s condensed consolidated balance sheet.

Summary of Contract Assets and Liabilities

2 unchanged sentences

License revenue recognized

Deferred revenue as of June 30, 2024

Deferred revenue as of September 30, 2024

Clinical Trial Collaboration with F.

2 unchanged sentences

Hoffmann-La Roche Ltd.

(“Roche”) entered into a clinical trial collaboration (the “Roche Clinical Collaboration”) pursuant to a clinical supply agreement to evaluate XTX101 in combination with atezolizumab (Tecentriq®) in a Phase 1/2 clinical trial consisting of Phase 1 dose escalation assessing the combination in patients with advanced solid tumors and Phase 2 assessing the combination in patients with microsatellite stable colorectal cancer.

(“Roche”) entered into a clinical trial collaboration (the “Roche Clinical Collaboration”) pursuant to a clinical supply agreement to evaluate vilastobart (XTX101) in combination with atezolizumab (Tecentriq®) in a Phase 1/2 clinical trial consisting of Phase 1 dose escalation assessing the combination in patients with advanced solid tumors and Phase 2 assessing the combination in patients with microsatellite stable colorectal cancer.

Under the clinical supply agreement, the Company is eligible to receive specified cost-sharing payments from Roche, and each company will supply its respective anti-cancer agent to support the Phase 1/2 clinical trial.

The Company is responsible for sponsoring and conducting the Phase 1/2 clinical trial and retains global development and commercialization rights to XTX101.

The Company is responsible for sponsoring and conducting the Phase 1/2 clinical trial and retains global development and commercialization rights to vilastobart.

The Company concluded that the cost-sharing payments from the Roche Clinical Collaboration are not in the scope of ASC 606 because the Company does not consider performing research and development services for reimbursement to be part of its ongoing major or central operations.

Therefore, the Company applied a reasonable, rational, and consistently applied accounting policy election to record the cost-sharing payments from the Roche Clinical Collaboration as a reduction of research and development expenses in the condensed consolidated statements of operations and comprehensive loss for the period in which a study development event is achieved.

During the three months ended June 30, 2024, the Company did not recognize a reduction of research and development expenses under the Roche Clinical Collaboration.

During the six months ended June 30, 2024, the Company recognized a reduction of research and development expenses of $ 2.0 million under the Roche Clinical Collaboration.

During the three months ended September 30, 2024, the Company did not recognize a reduction of research and development expenses under the Roche Clinical Collaboration.

During the three months ended September 30, 2023, the Company recognized a reduction of research and development expenses of $ 2.0 million under the Roche Clinical Collaboration.

During each of the nine months ended September 30, 2024 and 2023, the Company recognized a reduction of research and development expenses of $ 2.0 million under the Roche Clinical Collaboration.

Commitments and Contingencies

3 unchanged sentences

The Company has an option to extend the lease for an additional term of five years at then-market rates.

The Company is obligated to pay its portion of real estate taxes and costs related to the premises, including costs of operations, maintenance, repair, replacement, and management of the leased premises, which it began paying simultaneous with the rent commencement date in March 2020.

As of June 30, 2024 and December 31, 2023, the Company had a letter of credit for the benefit of its landlord in the amount of $ 1.6 million and $ 1.6 million, respectively, collateralized by a money market account, which is recorded as restricted cash on the condensed consolidated balance sheets.

with the rent commencement date in March 2020.

As of September 30, 2024 and December 31, 2023, the Company had a letter of credit for the benefit of its landlord in the amount of $ 1.6 million, collateralized by a money market account, which is recorded as restricted cash on the condensed consolidated balance sheets.

Preferred Stock and Common Stock

Undesignated Preferred Stock

As of June 30, 2024 and December 31, 2023, the Company’s certificate of incorporation, as amended, authorized the Company to issue up to 5,000,000 shares of undesignated preferred stock at $ 0.0001 par value per share.

As of June 30, 2024 and December 31, 2023, there were no shares of preferred stock issued or outstanding.

As of June 30, 2024 and December 31, 2023, the Company is authorized to issue up to 200,000,000 shares of common stock, $ 0.0001 par value per share under its certificate of incorporation, as amended.

As of September 30, 2024 and December 31, 2023, the Company’s certificate of incorporation, as amended, authorized the Company to issue up to 5,000,000 shares of undesignated preferred stock at $ 0.0001 par value per share.

As of September 30, 2024 and December 31, 2023, there were no shares of preferred stock issued or outstanding.

As of September 30, 2024 and December 31, 2023, the Company is authorized to issue up to 200,000,000 shares of common stock, $ 0.0001 par value per share under its certificate of incorporation, as amended.

Private Placement

8 unchanged sentences

Issuances or sales of common stock pursuant to the Sales Agreement are made under the Form S-3 and the corresponding prospectus related to the Sales Agreement, as supplemented by a prospectus supplement filed on April 15, 2024.

During the three and six months ended June 30, 2024, the Company issued and sold 7,000,000 shares of its common stock pursuant to the Sales Agreement at a weighted average price of $ 1.00 per share for aggregate gross proceeds of $ 7.0 million, before deducting commissions.

During the nine months ended September 30, 2024, the Company issued and sold 7,000,000 shares of its common stock pursuant to the Sales Agreement at a weighted average price of $ 1.00 per share for aggregate gross proceeds of $ 7.0 million, before deducting commissions.

The Company did no t sell any shares of its common stock pursuant to the Sales Agreement during the three months ended September 30, 2024.

Shares Reserved for Future Issuance

The Company has reserved for future issuances the following shares of common stock as of June 30, 2024 and December 31, 2023:

The Company has reserved for future issuances the following shares of common stock as of September 30, 2024 and December 31, 2023:

September 30,

Stock options and unvested restricted stock units

7 unchanged sentences

2021 Stock Incentive Plan

In September 2021, the Company’s board of directors and stockholders adopted the 2021 Stock Incentive Plan (the “2021 Plan”), which became effective immediately prior to the IPO in October 2021.

In September 2021, the Company’s board of directors and stockholders adopted the 2021 Stock Incentive Plan (the “2021 Plan”), which became effective immediately prior to the Company’s initial public offering of common stock (“IPO”) in October 2021.

Upon effectiveness of the 2021 Plan, the Company ceased granting awards under the 2020 Plan.

3 unchanged sentences

On January 1, 2024, the number of shares reserved for issuance under the 2021 Plan automatically increased by 1,380,663 shares.

As of June 30, 2024, there were 2,134,645 shares of common stock available for future issuance under the 2021 Plan.

As of September 30, 2024, there were 2,157,814 shares of common stock available for future issuance under the 2021 Plan.

2022 Inducement Plan

2 unchanged sentences

An aggregate of 275,000 shares of the Company’s common stock has been reserved for issuance under the 2022 Inducement Plan.

As of June 30, 2024, there were 220,000 shares of common stock available for future issuance under the 2022 Inducement Plan.

As of September 30, 2024, there were 220,000 shares of common stock available for future issuance under the 2022 Inducement Plan.

2021 Employee Stock Purchase Plan

1 unchanged sentence

The Company initially reserved 292,031 shares of common stock for issuance under the 2021 ESPP.

The 2021 ESPP provides that the number of shares of common stock reserved for issuance under the 2021 ESPP will be cumulatively increased on January 1 of each calendar year by 1 % of the number of shares of the Company’s common stock outstanding on such date or such lesser amount determined by the Company’s board of directors (up to a maximum increase of 584,062 shares of common stock per year).

The 2021 ESPP provides that the number of shares of common stock reserved for issuance under the 2021 ESPP will be cumulatively increased on January 1 of each calendar year by 1 %

of the number of shares of the Company’s common stock outstanding on such date or such lesser amount determined by the Company’s board of directors (up to a maximum increase of 584,062 shares of common stock per year).

On January 1, 2024, the number of shares reserved for issuance under the 2021 ESPP was increased by 276,132 shares.

During the six months ended June 30, 2024 and 2023, the Company issued 38,998 shares of common stock and 68,929 shares of common stock under the 2021 ESPP, respectively.

As of June 30, 2024, there were 938,378 shares of common stock available for future issuance under the 2021 ESPP.

During the nine months ended September 30, 2024 and 2023, the Company issued 38,998 shares of common stock and 68,929 shares of common stock under the 2021 ESPP, respectively.

As of September 30, 2024, there were 938,378 shares of common stock available for future issuance under the 2021 ESPP.

Stock-Based Compensation Expense

During the three and six months ended June 30, 2024 and 2023, the Company recorded compensation expense related to stock options, restricted stock units and restricted common stock for employees and non-employees and share purchases under the 2021 ESPP for employees, which was allocated as follows in the condensed consolidated statements of operations and comprehensive loss:

Three Months Ended June 30,

Six Months Ended June 30,

During the three and nine months ended September 30, 2024 and 2023, the Company recorded compensation expense related to stock options, restricted stock units and restricted common stock for employees and non-employees and share purchases under the 2021 ESPP for employees, which was allocated as follows in the condensed consolidated statements of operations and comprehensive loss:

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development expense

9 unchanged sentences

( 1,528,062 )

Outstanding as of June 30, 2024

Exercisable as of June 30, 2024

Outstanding as of September 30, 2024

Exercisable as of September 30, 2024

(1) The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock as of the end of the period.

Using the Black-Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the six months ended June 30, 2024 and 2023 was $ 0.68 and $ 1.96 , respectively.

The following assumptions were used in determining the fair value of options granted during the six months ended June 30 2024 and 2023:

Six Months Ended June 30,

Using the Black-Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the nine months ended September 30, 2024 and 2023 was $ 0.68 and $ 2.02 , respectively.

The following assumptions were used in determining the fair value of options granted during the nine months ended September 30, 2024 and 2023:

Nine Months Ended September 30,

Risk-free interest rate

2 unchanged sentences

Expected volatility

As of June 30, 2024, the Company had unrecognized stock-based compensation expense of $ 8.5 million related to stock options issued to employees and directors, which is expected to be recognized over a weighted-average period of 2.1 years.

As of September 30, 2024, the Company had unrecognized stock-based compensation expense of $ 7.0 million related to stock options issued to employees and directors, which is expected to be recognized over a weighted-average period of 2.1 years.

Restricted Stock Units

5 unchanged sentences

Unvested as of December 31, 2023

Unvested as of June 30, 2024

For the six months ended June 30, 2024, the Company recognized less than $ 0.1 million of stock-based compensation expense related to these awards.

As of June 30, 2024, the Company had unrecognized stock-based compensation expense of $ 0.1 million related to these restricted stock units, which is expected to be recognized over 3.5 years.

Unvested as of September 30, 2024

For the nine months ended September 30, 2024, the Company recognized less than $ 0.1 million of stock-based compensation expense related to these awards.

As of September 30, 2024, the Company had unrecognized stock-based compensation expense of $ 0.2 million related to these restricted stock units, which is expected to be recognized over 3.3 years.

Restricted Common Stock

2 unchanged sentences

Unvested as of December 31, 2023

Unvested as of June 30, 2024

Unvested as of September 30, 2024

In June 2020, the Company granted 552,546 shares of common stock underlying restricted stock awards, and the Company has not subsequently granted any additional restricted stock awards.

The aggregate fair value of the restricted stock awards that vested during the six months ended June 30, 2024 and 2023 was less than $ 0.1 million.

The aggregate fair value of the restricted stock awards that vested during the nine months ended September 30, 2024 and 2023 was less than $ 0.1 million.

Net Loss Per Share

1 unchanged sentence

The weighted average number of shares of common stock used in the basic and diluted net loss per share calculation includes the prefunded warrants issued in connection with the Company’s private placements with certain existing investors and Gilead, as the prefunded warrants are exercisable at any time for nominal cash consideration.

As of June 30, 2024, no prefunded warrants have been exercised and 19,509,891 prefunded warrants are outstanding.

As of September 30, 2024, no prefunded warrants have been exercised and 19,509,891 prefunded warrants are outstanding.

The following table sets forth the outstanding shares of common stock equivalents, presented based on amounts outstanding at each period end, that were excluded from the calculation of diluted net loss per share attributable to common stockholders during each period because including them would have been anti-dilutive:

Six Months Ended

Nine Months Ended

September 30,

Unvested restricted common stock

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements